Америка сегодня. Чикаго, Даллас и Бонды.

 

 

 

 Triumph Bancorp downgraded to Neutral from Overweight at Piper Jaffray  (22.55)

 

 

 

 S&P futures vs fair value: +29.50. Nasdaq futures vs fair value: +57.90.

 

 

 

 Alaska Air upgraded to Outperform at Cowen; tgt raised to $103  (89.11)Cowen upgrades ALK to Outperform from Market Perform and raises their tgt to $103 from $102 as the underlying industry fundamentals are improving. In addition, firm is more confident in co's ability to successful integrate Virgin America's operations into its own. Alaska should benefit from their regional strength, improving balance sheet and the improving domestic market. Street estimates have trended lower in recent months to what firm considers to be a more appropriate level. Going forward, firm believes the focus is about executing the strategy. Recent changes to Virgin America routes and mgmt's conservative approach to the merger gives us confidence in the outlook for co.

 

 

 

 

 

 Allegheny Tech upgraded to Hold from Sell at Berenberg  (17.10)

 Bank of America downgraded to Hold from Buy at Berenberg  (22.71)

 

 

 

 

 

 

 Gold Fields downgrade details — to Underperform at RBC Capital Mkts  (3.84)RBC Capital Mkts downgrades GFI to Underperform from Sector Perform. They believe that Gold Fields offers attractive medium-term growth through South Deep, Gruyere and Damang. However, to get there, the company needs to invest the bulk of its near-term free cash flow into projects, which leaves limited scope to de-lever the balance sheet further. The recent rally in the shares on rand devaluation lead the shares to be overvalued, they think.

 

 Overseas Research Calls

Upgrades: 

• America Movil SA (AMX) upgraded to Hold from Sell at Deutsche Bank
• HSBC Holdings (HSBC) upgraded to Hold from Sell at Investec
• William Hill PLC (WIMHY) upgraded to Neutral from Sell at UBS
• LVMH (LVMUY) upgraded to Buy from Hold at Berenberg

Downgrades: 

• Centrica (CPYYY) downgraded to Neutral from Buy at UBS
• Debenhams plc (DBHSY) downgraded to Sell from Hold at Investec
• E.ON AG (EONGY) downgraded to Hold from Buy at Jefferies
• MGM China (MCHVF) downgraded to Neutral from Overweight at JP Morgan
• Sands China (SCHYY) downgraded to Neutral from Overweight at JP Morgan
• SJM Holdings (SJMHF) downgraded to Underweight from Neutral at JP Morgan

Miscellaneous: 

• None of note

 Repligen initiated with a Equal-Weight at First Analysis Sec  (35.06)

 Walt Disney downgraded to Hold from Buy at Loop Capital  (114.44)

 

 Asian Markets Close: Nikkei +1.4%, Hang Seng +0.4%, Shanghai -1.4%

Equity indices in the Asia-Pacific region began the trading week on a mostly higher note. Results from the French presidential election saw Emmanuel Macron receive 23.8% of the vote, meaning he is headed for a May 7 run-off against Marine Le Pen, who secured 21.5% of yesterday's vote. Elsewhere, People's Bank of China Governor Zhou Xiaochuan said that China's 2017 GDP target of 6.5% is within reach.

• In economic data:
  • Japan's Leading Index 104.8 (expected 104.4; last 104.4)
  • Singapore's March CPI +0.7% year-over-year, as expected (last 0.7%) and Q1 Unemployment Rate held at 2.2%

---Equity Markets---

• Japan's Nikkei gained 1.4%. Sony jumped 3.8% after boosting its guidance while Panasonic rallied 3.3%. Consumer names like Fast Retailing, Kikkoman, Rakuten, J Front Retailing, and Familymart added between 1.9% and 3.7%.
• Hong Kong's Hang Seng added 0.4%. Financials had a good showing with Hang Seng Bank, China Life Insurance, Ping An Insurance, HSBC Holdings, BoC Hong Kong, and ICBC rose between 0.8% and 1.7%. On the downside, Galaxy Entertainment lost 1.9% and Sands China fell 1.5%.
• China's Shanghai Composite lost 1.4%. Henan Oriental Silver Star Investment, Xinjiang Urban Construction, Xiamen Overseas Chinese Electronic, Zhonghang Heibao, and Furen Pharmaceutical all lost near the limit, 10.0%.
• India's Sensex advanced 1.0%. GAIL jumped 3.2% while financials like AXIS Bank, HDFC Bank, and SBI gained between 1.2% and 2.6%. ICICI Bank bucked the trend, shedding 0.2%.

---FX---

• USDJPY +1.0% to 110.15
• USDCNY UNCH at 6.8849
• USDINR -0.3% to 64.441

 CSI Compressco LP target lowered to $9 at RBC Capital Mkts  (9.31)RBC Capital Mkts lowers their CCLP tgt to $9 from $12. CCLP announced ~50% distribution cut to $0.75/unit annualized, which follows ~25% cut early 2016. The compression market had seemed to be stabilizing, and this gives us pause on timing for recovery. However, investors were clearly not giving CCLP credit for its payout (16% yield pre cut), so this action looks prudent to manage balance sheet. Expecting weakness in the stock, but they believe cash flow valuation provides support.

 Global markets rally as centrist candidate Macron wins first round of French election   (234.59)

U.S. equity futures are higher by more than 1% this morning as global markets rally on the heels of the first round of France's Presidential election, which was won by centrist Emmanuel Macron. 

Macron's victory in the first round of the French election has eased some market concern about the probability of more radical candidates being elected, and potential implications around France's membership in the EU. One of those more radical candidates, Marine Le Pen (far right), will oppose Macron in the runoff round, but polls are suggesting Macron has a 20 point lead. That final runoff round of the election will take place on May 7. 

A presidential win for Macron would take the «Frexit» and EU disintegration idea off the table, so the more likely probability of that outcome is having a positive effect on risk assets globally. 

The French results have had a positive effect on the euro, which is up 1.2% against the dollar (+0.0128 at $1.0852/euro). French equities are sharply higher, with France's CAC index +4.5%, and French bond yields have come down as concerns about the fate of the EU ease a bit.

The rest of Europe is gaining with France, with Germany's DAX +3.0% and the UK's FTSE is +1.9%. Japan's Nikkei is +1.4%.

Several related ETFs are moving, with French ETF (EWQ) and the German ETF (EWG) both gapping up in early trade. Other related ETFs include Vanguard FTSE Europe (VGK), iShares Europe (IEV), iShares MSCI Eurozone (EZU), SPDR Euro STOXX 50 ETF (FEZ) and the Currencyshares Euro trust (FXE).

 Elli Mae target raised to $111 at RBC Capital Mkts ahead of earnings; expects beat and modest raise  (108.32)RBC Capital Mkts raises their ELLI tgt to $111 from $96. They see positives of slightly better 1Q17 mortgage volumes than expected 90 days ago, falling interest rates and pricing for ELLI. They expect a beat on 1Q17 and a likely modest raise for the year. Maintain Sector Perform on valuation and what they think remains a fluid rate environment.

 

 

 

 Nucor upgraded to Neutral from Underperform at Macquarie  (60.00)

 

 

 Knight Transportation upgraded to Buy from Neutral at UBS  (34.05)

 Playa Hotels & Resorts, Colony Starwood Homes (SFR) both initiated with Buy ratings at Deutsche Bank  (10.26)

 

 

 Early premarket gappers

Gapping up:

• BCR +19.7%, DB +10.2%, ING +7.5%, BBVA +7.4%, SAN +6.4%, WLL +5.9%, BCS +5.8%, STM +4.8%, TOT +4.8%, AEG +4.6%, CS +4.6%, ERIC +4.3%, NOK +4%, EDU +4%, MT +3.9%, SAP +3.8%, ALV +3.8%, JCP +3.8%, MTL +3.3%, UN +3.2%, ASML +3%, BBL +3%, CCE +2.8%, GLPG +2.7%, BHP +2.7%, AKS +2.7%, HAS +2.6%, X +2.5%, MS +2.3%, C +2.3%, ABB +2.3%, HSBC +2.3%, RIO +2.2%, BAC +2.2%, RDS.A +2.2%, GS +2.1%, JPM +2%, F +2%, RBS +1.9%, BP +1.8%, NVO +1.7%, PDS +1.6%, HAL +1.1%, OPB +1%

Gapping down:

• CYOU -9.5%, SOHU -5.7%, GFI -5.5%, HMY -5.5%, AU -4%, SBGL -3.8%, IAG -3.2%, AG -2.9%, GOLD -2.5%, GDX -2%, BDX -1.9%, GG -1.7%, ABX -1.6%, NEM -1.6%, TRUE -1.3%, SLW -1.1%, GLD -1.1%, VALE -0.8%, AUY -0.7%, SLV -0.7%

 

 On The Wires

• CUI Global's (CUI) subsidiary, Orbital Gas Systems, has received notification that, effective April 13, 2017, the Gas and Electrical Market Authority, had formally relaxed the accuracy requirement of Ofgem-approved CVDDs to 0.2 MJ/m3 (approximately 0.5%).
• Energy Recovery (ERII) to receive total awards of roughly $3 mln to supply its Pressure Exchanger technology to retrofit several desalination plants in Europe. The orders are expected to ship in the in the second half of 2017.
• Redhill Biopharma (RDHL) announces enrollment of the last patient in the Phase II study with Bekinda (RHB-102)1 12 mg for the treatment of diarrhea-predominant irritable bowel syndrome.
  • Top-line results are expected in the third 3Q17.
  • RedHill will host an R&D Day and live webcast on Bekinda on Thursday, April 27, 2017

 Honeywell target raised to $145 at RBC Capital Mkts — Smooth handoff in Darius’ debut 1Q beat & raise  (127.08)RBC Capital Mkts raises their HON tgt to $145 from $144. The CEO baton was passed smoothly from Dave Cote to Darius Adamczyk, as Outperform-rated Honeywell executed well against what they see as conservative 2017 guidance. The co is distancing itself from 2016 disappointments, and with shares still hovering near relative P/E support levels, they believe the stock is still too-cheap-too-ignore here, especially ahead of an expected positive earnings revision cycle following the «industrial recession».

 

 National Bank downgraded to Equal Weight from Overweight at a boutique firm  (31.58)

 

 

 

 

 Amazon target raised to $1250 at Wedbush; Q1 preview  (898.53)Wedbush raises their AMZN tgt to $1250 from $900. Firm expects AMZN to continue delivering substantial earnings growth, tempered by spending on new initiatives. Amazon appears intent upon growing annual profits, which they expect to continue as co invests in growth. AWS should be the growth engine, with its gross and operating margins expanding rapidly. The mix of Fulfillment by Amazon should drive further gross margin expansion and they expect int'l Prime membership growth to drive overall retail rev. Specifically, they expect Q1 rev of $35.97 bln, compared to consensus of $35.30 bln and guidance of $33.25 — 35.75 bln, driven by strong growth of Prime memberships, solid sales of Amazon-branded products, and AWS growth. They expect Q1 EPS of $1.30 vs. consensus of $1.13.

 Winnebago initiated with a Buy at CL King; tgt $32  (26.25)

 

 European Markets Update: FTSE +1.8%, DAX +3.0%, CAC +4.6%

Major European indices trade sharply higher in response to yesterday's vote in France, which has been deemed as favorable to the market. Centrist Emmanuel Macron (23.8%) received the most votes yesterday and will now take part in a run-off on May 7 against Marine Le Pen (21.5%). Investors have cheered yesterday's outcome, but it is worth noting that the strong support behind Ms. Le Pen suggests that parliamentary elections in June will result in National Front becoming the country's opposition party. The euro has jumped 1.2% against the dollar to 1.0860.

• In economic data:
  • Germany's April Ifo Business Climate 112.9 (expected 112.5; last 112.4). April Current Assessment 121.1 (expected 119.2; last 119.5) and April Business Expectations 105.2 (expected 106.0; last 105.7)
  • UK's April CBI Industrial Trends Orders 4 (expected 5; last 8)

---Equity Markets---

• UK's FTSE has jumped 1.8% with financials leading the way. Barclays, Standard Chartered, Old Mutual, RSA Insurance, Prudential, Lloyds Banking, RBS, and HSBC are up between 1.9% and 5.0%. Select miners like BHP Billiton, Antofagasta, Glencore, and Rio Tinto hold gains between 2.3% and 3.0%.
• Germany's DAX has spiked 3.0% to a fresh record high. Commerzbank leads with a gain of 9.6% while Deutsche Bank has surged 7.8%. Heavyweights like Siemens, BASF, BMW, Bayer, Volkswagen, and Daimler have rallied between 2.6% and 4.9%.
• France's CAC has soared 4.6% to levels not seen since early 2008. Bank stocks like Societe Generale, Credit Agricole, and BNP Paribas are all up between 8.0% and 9.8%. Peugeot and Renault hold respective gains of 6.6% and 5.4% while LafargeHolcim is the lone decliner, sliding 1.1%.

 

 

 

 

 On The Wires

• Cancer Genetics (CGIX) announced today the successful CLIA validation and approval of its immuno-oncology assay on Complete::IO.
• ATyr Pharma (LIFE) obtained promising clinical results from its Phase 1b/2 003 trial assessing the safety and potential activity of Resolari in patients with early onset facioscapulohumeral muscular dystrophy.
  • 63% of Patients Observed Increased Muscle Strength
  • 67% of patients measured had improvement in their Individualized Neuromuscular Quality of Life score
• Akers Biosciences (AKER) Akers Wellness app, which enables users to track the results of breath-based tests via their mobile device has been approved by the Apple App Store and is now available for download on iOS devices.
• Global Payments (GPN) agreed to renew its relationship with Caesars Entertainment Corporation (CZR). Terms not disclosed.

 

 Veeco Instruments target raised to $36 at Needham  (31.00)Needham raises their VECO tgt to $36 from $30 based on improved industry outlook in the LED space and positive announcements by UTEK [N/R], suggesting business momentum for the acquisition target. Recent checks and datapoints in the LED space suggest strengthened demand with multiple leading LED makers reporting full utilization. As a result, firm sees increased appetite for capacity additions, which should support stronger MOCVD demand in the coming quarters. With the strong 1Q17 results from UTEK and the acquisition process entering the home stretch, they are increasingly confident on the earnings potential of the combined entity, and raised their post acquisition ests; Buy.

 

 S&P futures vs fair value: +29.30. Nasdaq futures vs fair value: +59.30.

Equity futures trade solidly higher this morning as investors cheer the results of yesterday's French vote. The S&P 500 futures trade 29 points, or 1.3%, above fair value.

Centrist candidate Emmanuel Macron and far-right candidate Marine Le Pen will face-off in the final round of the French presidential election on May 7 after receiving 23.8% and 21.5% of votes in the first round, respectively. Polls suggest that Macron currently has a 20 point lead on Le Pen, which has eased concerns surrounding Le Pen's anti-EU vision for France.

U.S. Treasuries are trading lower across the board this morning amid the risk-on sentiment; the benchmark 10-yr yield is higher by five basis points at 2.30%. Meanwhile, the U.S. Dollar Index (98.92, -0.74) is lower by 0.7% with the greenback losing 1.2% against the euro (1.0857). 

After losing nearly 7.0% last week, crude oil is showing strength in early action, up 0.7% at $49.97/bbl. According to Reuters, a panel of OPEC and other allied producers spoke in favor of extending the original OPEC/non-OPEC production cut agreement by another six months. 

Investors will not receive any notable economic data on Monday.

In U.S. corporate news:

• Kimberly-Clark (KMB 129.00, -0.96): -0.7% after missing earnings estimates.
• Halliburton (HAL 47.68, +0.62): +1.3% after reporting better than expected earnings results.
• Philips (PHG 34.31, +1.66): +5.1% after beating bottom-line estimates. 
• Hasbro (HAS 99.68, +3.65): +3.8% after reporting better than expected top and bottom lines. 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the trading week on a mostly higher note. Japan's Nikkei +1.4%, Hong Kong's Hang Seng +0.4%, China's Shanghai Composite -1.4%, India's Sensex +1.0%.
  • In economic data:
    • Japan's Leading Index 104.8 (expected 104.4; last 104.4)
    • Singapore's March CPI +0.7% year-over-year, as expected (last 0.7%) and Q1 Unemployment Rate held at 2.2%
  • In news:
    • People's Bank of China Governor Zhou Xiaochuan said that China's 2017 GDP target of 6.5% is within reach.

• Major European indices trade sharply higher in response to yesterday's vote in France, which has been deemed as favorable to the market. UK's FTSE +1.8%, Germany's DAX +3.0%, France's CAC +4.6%. 
  • In economic data:
    • Germany's April Ifo Business Climate 112.9 (expected 112.5; last 112.4). April Current Assessment 121.1 (expected 119.2; last 119.5) and April Business Expectations 105.2 (expected 106.0; last 105.7)
    • UK's April CBI Industrial Trends Orders 4 (expected 5; last 8)
  • In news:
    • Centrist Emmanuel Macron (23.8%) received the most votes yesterday and will now take part in a run-off on May 7 against Marine Le Pen (21.5%).
    • Investors have cheered the outcome of the French vote, but it is worth noting that the strong support behind Ms. Le Pen suggests that parliamentary elections in June will result in National Front becoming the country's opposition party.

 Surgery Partners target lowered to $18 from $19 at Stifel due to negative mix and higher operating expense assumptions, which firm believes will stem primarily from anesthesia practices; Hold  (17.60)

 

 European Summary

French/German Spreads Narrow on French Election Relief

• Safe-haven European government bonds including German and U.K. debt are moving sharply lower today in the wake of the pro-euro result to the first round of the French presidential election, held on Sunday. Bonds of France and the eurozone periphery, meanwhile, are trading sharply higher as the eurozone appears to have dodged a meteor as Emmanuel Macron and Marine Le Pen advance to the second round of voting, scheduled for May 7. National Front candidate Marine Le Pen had previously promised to withdraw France from the single currency bloc and, had she faced a weaker candidate than Macron in the second round, she may have gained the means to do so. Macron is seen as even more likely to prevail against Le Pen than center-right candidate Francois Fillon and Communist-backed Jean-Luc Melenchon. Macron now polls around 60/40 or better against Le Pen for the run-off round. The euro is trading higher ($1.14% to $1.0849) and it's probably now or never for a sustained rally in the single currency. Several tests have been made of the $1.05 level — in early 2015, late 2015, and late 2016 — but all attempts to reach parity with the dollar have failed. In economic data releases, Ifo's Business Climate Index climbed by more than expected for April. Investors and economists will closely scrutinize the hard economic data in the wake of today's vote and the one on May 7 to determine if the recent improvement in growth continues 
• New Issuance:
  • Italy tapped a 2-year CTZ for EUR2.0 bln at an average yield of -0.075% with a bid-to-cover ratio of 1.70
• Economic Data:
  • Germany's Ifo Business Climate Index rose more than expected to 112.9 for April from 112.4 in March
    
    • The Business Expectations Index unexpectedly fell to 105.2 from 105.7
    • The Current Assessment unexpectedly jumped to 121.1 from 119.5
  • In the U.K., CBI Industrial Trends Orders fell more than expected to 4 in April from 8 in March
    
    • The Rightmove House Price Index was up 1.1% m/m in April (1.3% prior)
• Yield Check:
  • France, 10-yr OAT: -7 bps to 0.85%
  • Germany, 10-yr bund: +9 bps to 0.34%
  • Greece, 10-yr note: -20 bps to 6.36%
  • Italy, 10-yr BTP: -8 bps to 2.21%
  • Portugal, 10-yr PGB:  -9 bps to 3.64%
  • Spain, 10-yr ODE: -8 bps to 1.62%
  • U.K., 10-yr gilt: +6 bps to 1.10%

 On The Wires

• Ocular TherapeutiX (OCUL) announced new data to be presented from its most recent Phase 3 study evaluating the efficacy and safety of Dextenza for intracanalicular use, for the treatment of ocular pain and inflammation following cataract surgery, at the upcoming American Society of Cataract and Refractive Surgery Annual Meeting, being held May 5-9.
• Inovio Pharmaceuticals (INO) has commenced a phase 2 trial to evaluate the efficacy of VGX-3100 in patients with pre-cancerous lesions of the vulva, or vulvar intraepithelial neoplasia. The immunotherapy will be administered with Inovio's Cellectra device. The primary endpoint of the study is histologic clearance of high-grade lesions and virologic clearance of the HPV virus in vulvar tissue samples. The study will also evaluate safety and tolerability of VGX-3100.
• Lipocine (LPCN) announced the completion of enrollment for both its dosing validation study and its dosing flexibility study for LPCN 1021. Co anticipates announcing the top-line results from these studies in June 2017.
• Torchlight Energy Resources (TRCH) has successfully tested the Flying B Ranch #2 vertical well in the Lower Wolfcamp A and Upper Wolfcamp B sections. The well is still in the flowback process and improving during clean-up of the 2000 barrels of frac load remaining. The well is currently testing at ~20 barrels of oil per day with associated gas which has yet to be measured.
  • The Flying B Ranch #3H is being permitted and will be spud sometime in mid to late June.
• Micron Technology (MU) and Microsoft (MSFT) announced a collaboration that aims to address the major challenge of providing trusted computing models for IoT deployments in industrial, automotive and consumer environments.
• RadNet (RDNT) announced that Shin Imaging Center has selected its Radiology Information System, PACS, Speech Recognition, and Patient and Physician Portals to manage its clinical and business workflows.

 Gapping up

Gapping up
In reaction to strong earnings/guidance:

• IBCP +6.5%, PHG +5%, HAS +4.9%, EDU +4%, HAL +1.8%, PDS +1.6%, ITW +1.6%, OPB +1%, SYT +0.7%, TRST +0.6%

M&A news:

• BCR +19.3% (C.R. Bard (BCR) to be acquired by Becton Dickinson and Co (BDX) for $317.00 per share)

Select financial related names showing strength post French elections:

• DB +10.2%, BBVA +7.4%, ING +7%, SAN +6.4%, BCS +5.7%, CS +4.9%, RBS +2.8%, C +2.4%, HSBC +2.4%, MS +2.2%, BAC +2.1%, JPM +2%, GS +2%

Select EU stocks trading higher with regional indices higher by 2-5%:

• ORAN +6%, SNY +5.1%, MT +4.6%, ERIC +4.3%, NOK +4.2%, STM +4%, SAP +3.6%, ALV +3.5%, ASML +3.2%, UN +2.9%, RACE +2.9%, MTL +2.9%, BBL +2.9%, CCE +2.6%, BHP +2.2%, RIO +2.2%, ABB +2%, NVO +1.8%, GLPG +1.4%

Select oil/gas related names showing strength:

• AEG +5.2%, TOT +4.8%, RDS.A +2.2%, BP +1.8%, WLL +1.7%

Other news:

• OPTT +44.8% (co's PB3 PowerBuoy was deployed off the coast of Kozu-shima Island in Japan as part of its first lease agreement with Mitsui Engineering and Shipbuilding)
• AMDA +18.4% (granted marketing clearance for its Valeo interbody fusion devices in Australia)
• DRRX +15.7% (clinical data on DUR-928 were presented )
• HTGM +5.4% (enters into a research collaboration agreement with Instituto Valenciano de Oncología)
• PRTK +3% (presents data from its Phase 3 study of omadacycline)
• NVS +1.5% (reports new data confirming benefit of Gilenya on 4 key measures of disease activity in relapsing MS)

Analyst comments:

• MLCO +4.1% (upgraded to Buy from Hold at Union Gaming)
• AKS +3.1% (upgraded to Outperform from Neutral at Macquarie)
• XLNX +2.4% (upgraded to Outperform from Neutral at Credit Suisse)
• NUE +2.3% (upgraded to Neutral from Underperform at Macquarie)
• X +2% (upgraded to Neutral from Underperform at Macquarie)
• AMZN +1.1% (target raised to $1250 at Wedbush)

 Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

• CYOU -8.3%, SOHU -4.2%, KMB -1.8%

M&A news:

• BDX -4.5% (C.R. Bard (BCR) to be acquired by Becton Dickinson and Co (BDX) for $317.00 per share)

Select metals/mining stocks trading lower with Gold Futures -1.5% and Silver -0.6%:

• AUY -3%, GOLD -3%, SBGL -2.7%, AG -2.5%, IAG -2.3%, ABX -2.3%, GDX -2.2%, SLW -2.2%, HMY -2.1%, GG -2%, MUX -2%, NEM -1.8%, GLD -1.3%, SLV -1.1%

Other news:

• XOMA -4.9% (received notice from Novo Nordisk (NVO) of its termination of an exclusive license agreement due to strategic and business reasons)
• EYEG -4.3% (files for $11.5 mln common stock offering)
• TRUE -1.3% (expects to offer 1,000,000 shares of common stock in the offering and certain existing stockholders of the co are expected to offer 7,500,000 shares in the offering)
• VRAY -1.3% (files for $100 mln mixed securities shelf offering)

Analyst comments:

• GFI -6.2% (downgraded to Underperform from Sector Perform at RBC Capital Mkts)
• AU -3.9% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
• GRPN -1.3% (downgraded to Underweight from Equal-Weight at Morgan Stanley)

 

 S&P futures vs fair value: +29.80. Nasdaq futures vs fair value: +63.90.

The S&P 500 futures trade 30 points, or 1.3%, above fair value as investors cheer yesterday's French vote.

Congress will return from its spring recess on Tuesday with just four days to prevent a government shutdown. Reports indicate that congressional Republicans may use the deadline to leverage funding for Mr. Trump's promised barrier along the U.S./Mexico border. 

In addition to Capitol Hill, investors will be keeping an eye on the White House this week as President Trump has promised to unveil his tax reform plan, which he says will include a «massive» tax.

 Gapping up/down: PHG +5%, HAS +5%, EDU +4% and HAL +2% after earnings; BCR +19% after merger with BDX (-4.5%), Banks and EU names higher post French elections; CYOU -8%, SOHU -4% and KMB -2% after earnings

Gapping up
In reaction to strong earnings/guidance:

• IBCP +6.5%, PHG +5%, HAS +4.9%, EDU +4%, HAL +1.8%, PDS +1.6%, ITW +1.6%, OPB +1%, SYT +0.7%, TRST +0.6%

M&A news:

• BCR +19.3% (C.R. Bard (BCR) to be acquired by Becton Dickinson and Co (BDX) for $317.00 per share)

Select financial related names showing strength post French elections:

• DB +10.2%, BBVA +7.4%, ING +7%, SAN +6.4%, BCS +5.7%, CS +4.9%, RBS +2.8%, C +2.4%, HSBC +2.4%, MS +2.2%, BAC +2.1%, JPM +2%, GS +2%

Select EU stocks trading higher with regional indices higher by 2-5%:

• ORAN +6%, SNY +5.1%, MT +4.6%, ERIC +4.3%, NOK +4.2%, STM +4%, SAP +3.6%, ALV +3.5%, ASML +3.2%, UN +2.9%, RACE +2.9%, MTL +2.9%, BBL +2.9%, CCE +2.6%, BHP +2.2%, RIO +2.2%, ABB +2%, NVO +1.8%, GLPG +1.4%

Select oil/gas related names showing strength:

• AEG +5.2%, TOT +4.8%, RDS.A +2.2%, BP +1.8%, WLL +1.7%

Other news:

• OPTT +44.8% (co's PB3 PowerBuoy was deployed off the coast of Kozu-shima Island in Japan as part of its first lease agreement with Mitsui Engineering and Shipbuilding)
• AMDA +18.4% (granted marketing clearance for its Valeo interbody fusion devices in Australia)
• DRRX +15.7% (clinical data on DUR-928 were presented )
• HTGM +5.4% (enters into a research collaboration agreement with Instituto Valenciano de Oncología)
• PRTK +3% (presents data from its Phase 3 study of omadacycline)
• NVS +1.5% (reports new data confirming benefit of Gilenya on 4 key measures of disease activity in relapsing MS)

Analyst comments:

• MLCO +4.1% (upgraded to Buy from Hold at Union Gaming)
• AKS +3.1% (upgraded to Outperform from Neutral at Macquarie)
• XLNX +2.4% (upgraded to Outperform from Neutral at Credit Suisse)
• NUE +2.3% (upgraded to Neutral from Underperform at Macquarie)
• X +2% (upgraded to Neutral from Underperform at Macquarie)
• AMZN +1.1% (target raised to $1250 at Wedbush)

Gapping down
In reaction to disappointing earnings/guidance:

• CYOU -8.3%, SOHU -4.2%, KMB -1.8%

M&A news:

• BDX -4.5% (C.R. Bard (BCR) to be acquired by Becton Dickinson and Co (BDX) for $317.00 per share)

Select metals/mining stocks trading lower with Gold Futures -1.5% and Silver -0.6%:

• AUY -3%, GOLD -3%, SBGL -2.7%, AG -2.5%, IAG -2.3%, ABX -2.3%, GDX -2.2%, SLW -2.2%, HMY -2.1%, GG -2%, MUX -2%, NEM -1.8%, GLD -1.3%, SLV -1.1%

Other news:

• XOMA -4.9% (received notice from Novo Nordisk (NVO) of its termination of an exclusive license agreement due to strategic and business reasons)
• EYEG -4.3% (files for $11.5 mln common stock offering)
• TRUE -1.3% (expects to offer 1,000,000 shares of common stock in the offering and certain existing stockholders of the co are expected to offer 7,500,000 shares in the offering)
• VRAY -1.3% (files for $100 mln mixed securities shelf offering)

Analyst comments:

• GFI -6.2% (downgraded to Underperform from Sector Perform at RBC Capital Mkts)
• AU -3.9% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
• GRPN -1.3% (downgraded to Underweight from Equal-Weight at Morgan Stanley)

 Mazor Robotics downgraded to Equal Weight from Overweight at Barclays  (35.68)

 

 Dollar Tree upgraded to Buyfrom Accumulate at Johnson Rice  (78.81)

 

 Adamis Pharma: Perceptive Advisors discloses 5.57% passive stake  (3.85)

 

 

Bioverativ downgrade details — to Hold at Gabelli & Co on valuation  (57.18)Gabelli & Co downgrades BIVV to Hold from Buy. Firm calls attention to the fact that shares are up 29% since they initiated coverage in Feb, and they no longer see a sufficient margin of safety to recommend purchase. Although potential upside is expected in a takeout scenario, firm does not see it as a NT catalyst. Firm recommends that investors Hold BIVV as a 4% discount to their 2018 PMV of $60 per share does not provide a sufficient margin of safety.

 Filings, Offerings and Pricings

Filings:

• Capnia (CAPN) files for 32,730,600 share common stock offering by holders
• Eyegate Pharma (EYEG) files for $11.5 mln common stock offering
• Ionis Pharma (IONS) files for common stock shelf offering
• TPI Composites (TPIC) files for $100 mln common stock offering
• U.S. Bancorp (USB) files mixed securities shelf offering
• ViewRay (VRAY) files for $100 mln mixed securities shelf offering

Offerings:

• TrueCar (TRUE) announces proposed public offering, planning to offer 1 mln shares of common stock and certain existing stockholders are expected to offer 7.5 mln shares

Pricings:

• SPI Energy (SPI 0.52) enters share purchase agreement with Tiger Capital Fund SPC; Tiger will purchase 80 mln ordinary shares for an aggregate of $5.76 mln

 On The Wires

• Interpace Diagnostics (IDXG) will present at RedChip's Global Online Growth Conference on April 26, 2017, at 1:30 ET.
• Lockheed Martin (LMT) will manufacture additional AN/TPQ-53 counterfire radar systems for the U.S. Army under a $1.6 bln order-dependent contract. The Q-53 radar system supports troops in combat by detecting, classifying, tracking and identifying the location of enemy indirect fire in either 360- or 90-degree modes.
• RE/MAX (RMAX) and HouseCanary announced their collaboration aiming to make RE/MAX agents «more productive than ever». Data from RISMedia's 2016 Power Broker Report as well as the 2016 REAL Trends 500 survey shows that RE/MAX agents outsell other agents by more than 2 to 1 at large brokerages included in the surveys.
• Verizon (VZ) today launched Fios Gigabit Connection, the nation's largest deployment of gigabit Internet connection service; priced at $69.99 a month standalone and starting at $79.99 a month for a triple play bundle when ordered online.

 

 

 

 

 Hearing InfraREIT was upgraded to Outperform from Peer Perform at Wolfe Research  (18.77 +0.75)

 

 Hearing BB&T Corp was upgraded to Long-term Buy from Neutral at Hilliard Lyons  (43.96 +1.03)

 

 Opening Market Summary: Equities Open the Week Solidly Higher

The S&P 500 opens the week with a solid gain of 1.0%.

Eight of eleven sectors trade in positive territory with the financial group (+2.2%) leading the advance. In general, cyclical sectors outperform their countercyclical peers as investors embrace the day's risk-on sentiment. Only the utilities, telecom services, and real estate sectors trade in the red, showing losses of no more than 0.3%.

In the bond market, Treasuries trade lower across the board, leaving the benchmark 10-yr yield (2.29%) higher by five basis points. For its part, gold is down 1.3% at $1,271.70/ozt.

 Sector Summary: Technology (XLK +1.00%) trading higher today, in-line with the broader market

The tech sector — XLK — trades in-line with the broader market. Semiconductors, meanwhile, display relative strength as the SOX index trades +1.43%. Within the SOX index, ASML (+2.84%) outperforms, while MU (-1.19%) lags. Among other major indices, the SPY is trading 0.98% higher, while the QQQ +1.06% and the NASDAQ +1.30% trade modestly higher on the session. Among tech bellwethers, ORAN (+6.18%) is showing relative strength, while VZ (-0.45%) lags.

Notable laggards following earnings:

• CYOU (-4.7%), SOHU (-1.8%)

Gainers on news:

• UPLD (+6.7%) co acquired RightAnswers for $17.2 mln in cash at closing; revised FY 17 revs guidance to be in the range of $87-91 mln.
• CY (+1.3%) co shareholder TJ Rodgers files 2nd lawsuit ' seeking to compel the Cypress Board of Directors to make supplemental and corrective disclosures to address numerous material omissions and misstatements of fact in the Cypress Board's proxy materials'.
• NFLX (+1.0%) co proposed an offering of €1 bln of Senior Notes.

Laggards on news:

• INSG (-3.4%) in connection with Inseego Corp.'s proposed sale of Novatel Wireless to Jade Ocean Global Limited, on April 24 the parties voluntarily withdrew and re-filed the Joint Voluntary Notice that they had previously submitted to the CFIUS.
• STV (-2.9%) co provided an update on the sale of its interests in Beijing Super TV.
• TOSBF (-1.5%) co has decided to split off its four in-house companies into wholly-owned subsidiaries.

Among notable analyst upgrades:

• XLNX (+3.4%) upgraded to Outperform from Neutral at Credit Suisse
• IDCC (+4.0%) to Buy from Neutral at B. Riley & Co.
• ADI (+2.6%) to Overweight from Equal Weight at Stephens

Among notable analyst downgrades:

• GRPN (-2.7%) downgraded to Underweight from Equal Weight at Morgan Stanley
• CRTO (-0.1%) to Mkt Perform from Outperform at Raymond James

Scheduled to report earnings after the bell:

• CDNS, LLNW, RMBS, SANM, TMUS, UIS

Scheduled to report earnings tomorrow morning:

• AXE, GLW, CTG, ERIC, RDWR, SAP, XRX

 

 Hearing Clearwater Paper was upgraded to Buy from Hold at Vertical  (49.85 +1.35)

 Early Options Activity

Taking an early look at the options market, we found the following names that may be worth watching throughout the day for further indication of investor expectations given their options volume and implied volatility movement.

Stocks seeing volatility buying (bullish call buying/bearish put buying):

Calls:

• MCD Weekly Apr28 136 calls are seeing interest ahead of earnings tomorrow April 25 before the open with 2550 contracts trading vs. open int of 360, pushing implied vol up around 3 points to ~24% 

Puts:

• GME Weekly May12 23 puts are seeing interest with 50901 contracts trading vs. open int of 50, pushing implied vol up around 7 points to ~40% — co is expected to report earnings late March and is expected to report its next quarterly earnings report late May.

Stocks seeing volatility selling:

• HAS, HAL, TNC implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.99… VIX: (11.92, -2.71, -18.5%).
May 19 is options expiration — the last day to trade May equity options.
*Please use the Talk to Us link at the top of the page to provide feedback on this comment as well as the OPTNX comments.

 Morning Commodities: Commodities In The Red, WTI Oil Remains Below $50

• Commodities are beginning the day lower
  • Overall, commodities, as measured by the Bloomberg Commodity Index, are currently -0.4% at 83.6113
• Dollar index is currently -0.9% at 99.07
• Looking at energy…
  • June WTI crude oil futures are now -$0.34 (or -0.7%) at $49.28/barrel
  • In other energy, May natural gas is -$0.07 (or -2%) at $3.04/MMBtu
• Moving on to metals…
  • June gold is currently -$15.30 (or -1.2%) at $1273.80/oz, while May silver is -$0.08 (or -0.4%) at $17.78/oz
  • May copper is now +$0.01 (or +0.21%) at $2.54/lb

 

 

 

 Sector Summary: Industrial sector trades slightly higher than the broader market

The industrial sector (XLI +1.1%) is trading 0.2% higher than the broader market (SPY +0.9%). In a slow day for the sector (CAT +2.57%) reports retail data.

Earnings/Guidance

• Illinois Tool (ITW +4.9%) Reports Q1 GAAP earnings of $1.54/share, may not be comparable to the consensus of $1.45. Revs rose 6.0% year/year to $3.47 bln vs the $3.4 bln consensus.
  • Co issues in-line guidance for Q2, seeing EPS of $1.55-1.65 vs. $1.60 Consensus.
  • Co raises guidance for FY17, sees EPS of $6.20-6.40 vs. $6.19 consensus, up from $6.00-6.20.
• Philips (PHG +5.27%) beats by $0.05, reports revs in-line; FY17 outlook reaffirmed
  • Revs rose 3.8% y/y to €5.72 bln vs the €5.7 bln consensus.
  • Guidance not changed
• Tennant (TNC +0.2%) beats by $0.06, beats on revs; updates FY17 guidance to include IPC Group acquisition and various charges
  • Revs rose 6.2% y/y to $191.1 mln vs the $181.82 mln consensus
  • Co issuesguidance for FY17, sees EPS of $2.40-2.60 vs $2.50-2.70, may not be comparable to $2.63 Capital IQ Consensus; sees FY17 revs of $960-990 mln vs $810-830 mln, may not be comparable to $820.42 mln Capital IQ Consensus

Notable Upcoming Industrial Earnings

• Canadian National Railway(CNI +1.2%) and Swift Transportation (SWFT +3.4%) to report after the bell.

News

• Caterpillar (CAT +2.5%) reports March 2017 retail data; total machines worldwide +1% vs -1% in February of 2017
  • Total energy & transportation +1% vs -9%

Broker Research

Upgrades

• Alaska Air (ALK +1.2%) upgraded to Outperform at Cowen; tgt raised to $103
• Honeywell (HON +2.1%) target raised to $145 at RBC Capital Mkts

Downgrades

• Grainger (GWW -1.8%) downgraded to Market Perform from Outperform at William Blair
• General Electric (GE +.1%) target lowered to $35 at RBC Capital Mkts

Other

• Ritchie Bros. (RBA +2.5%) resumed with an Outperform at William Blair
• Rockwell Collins (COL +1.5%) resumed with a Overweight at JP Morgan

 Hearing ViewRay was initiated earlier with a Sell at Empire  (6.39 -0.45)

 

 ETFs that traded to 52 week highs/lows this sessionETFs that traded to 52 week highs: BJK, CUT, EFA, EPOL, EWG, EWI, EWK, EWN, EWO, EWP, EWQ, EZU, FDN, IGV, IHI, ITB, IWF, PHO, QQQ, SKYY, VGK, XHB, XLK, XLY

ETFs that traded to 52 week lows: FUD, VXZ

 

 

 

 European Markets Closing PricesEuropean markets are now closed; stock markets across Europe performed as follows:

• UK's FTSE: + 2.1%
• Germany's DAX: + 3.4%
• France's CAC: + 4.1%
• Spain's IBEX: + 3.7%
• Portugal's PSI: + 2.5%
• Italy's MIB Index: + 4.8%
• Irish Ovrl Index: + 3.0%
• Greece ASE General Index: + 1.8%

 Sector Summary: S&P Consumer Discretionary Index 0.6%, modestly underperforming the broader marketThe consumer discretionary group is slightly underperforming the broader market. The retail group is also in the red with the Retail HOLDRS Trust (RTH) 0.6% and the SPDR S&P Retail ETF (XRT) 0.5%.

Notable earnings/guidance: 

• Trading higher following earnings/guidance:
  • HAS +5.8%
  • ITW +4.6%
  • CAT 2.4% (Caterpillar reports March 2017 retail data; total machines worldwide +1% vs -1% in February of 2017)
  • EDU +0.2%
• Lower following guidance/update:
  • SHLD -2.2% (Sears Holdings updates strategic restructuring program — evaluating bids for real estate properties in excess of $700 mln, names Rob Riecker CFO and reports Q1 update)… Dept store names are lower in sympathy (SHOS -1.77%, JWN -1.55%, M -1.32%, JCP -0.36%, DDS -0.09%)

In the news:

• National Retail Federation's annual survey conducted by Prosper Insights & Analytics reported that consumers plan to spend more than ever on Mother's Day this year as they shower moms with everything from jewelry to special outings at favorite restaurants.
• WSJ reported that brick-and-mortar stores expected to close at record pace this year. 
• Leaders:  
  • HTZ 2.6% (Hertz Global and Dollar Thrifty to pay C$1.25 million penalty for advertising unattainable prices and discounts)
  • FRED 3.8% (Fred's announces cooperation agreement w/ shareholder Alden Global and 2 new Board appointments)
  • PBS 0.5% (Moody's says the reinstatement of UHF discount is credit positive for US TV broadcasters — sees consolidation as imminent)
• Laggards:
  • MAT -0.7% (continued weakness following earnings)

Other notable trends:

• Restaurant/QSR names are mostly higher today: SONC +6.3% (upgraded to Overweight from Equal Weight at a boutique firm), SAUC +6%, DAVE +5.1%, WING +4%, RT +2.4%, LOCO +2%, CAKE +1.8%, NDLS +2.8%, RUTH +1.7%, FRGI 1.8% (announces new strategic plan including store closures; reports 1Q17 prelim comps decreased 6.7% and 4.5% at Pollo Tropical and Taco Cabana, respectively), QSR +1.6%, BWLD +1.6%, YUM +1.5%, WEN +1.4%, TXRH +1.2%, FOGO +1.3%, YUMC +1.2%, BJRI +1.2%, EAT +1%, DRI +0.9%, DNKN +0.8%
• Homebuilders are under pressure: CHCI -2%, PHM -1.5%, TOL -0.9%, LGIH -0.9%, LEN -0.9%, CAA -0.7%, DHI -0.6%, MHO -0.6%, KBH -0.3%, BZH -0.4%, MDC -0.4%, UCP -0.2%, ITB -0.2%, WLH -0.1% 

Analyst related:

• Upgrades: DLTR 1.1% ( upgraded to Buy from Accumulate at Johnson Rice)
• Downgrades: DIS -0.3% (downgraded to Hold from Buy at Loop Capital), SBH -2.3% (downgraded to Sector Weight from Overweight at KeyBanc Capital Mkts), GRPN 1.1% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
• Misc: WGO 2.1% (initiated with a Buy at CL King)

Looking ahead:

• On the earnings front: JJSF, WHR report today after the close; MMM, AN, EAT, CAT, DFRG, GCI, JAKK, MCD, PII, PHM, RAD, SPGI, SVU report tomorrow before the open.

 Rumor Round Up

Rumor Activity was slow to start the week.

• Bloomberg detailed that Sprint (S 8.69 +0.19) might look for M&A other deals instead of T Mobile (TMUS 66.35 +0.68).
• Sunday Times UK discussed that BP (BP 34.42 +0.42) might swap tar sands unit with Husky Energy (HUSKF 11.55 +0.16) natural gas assets.
• Sunday Times UK reported that Imagination Tech (IGNMF 1.28 -0.01) might sell stake in unit to raise funds.

While many rumors circulate during the day, and the validity of the source of these rumors can be questionable, the speculation may increase volatility in the near term.

 

 

 Market Internals

The broader market is higher at the moment, albeit well off highs of the day as the Nasdaq Composite gains about 67 points (+1.13%) to 5977, the Dow Jones Industrial Average adds about 207 (+1.00%) to 20753, while the S&P 500 is up 23 (+0.97%) to 2371. Action has come on mixed average volume (NYSE 340 vs. avg. of 305; NASDAQ 734 mln vs. avg. of 782), with advancers outpacing decliners (NYSE 2134/833, NASDAQ 2067/714) and new highs outpacing new lows (NYSE 230/15, NASDAQ 236/29).

Relative Strength:

Italy-EWI +5.8%, France-EWQ +5.3%, Spain-EWP +4.9%, Germany-EWG +4.4%, Austria-EWO +4.2%, Greece-GREK +4.2%, Sweden-EWD +3.9%, Infrastructure-GRID +2.8%, Reg. Banking-KRE +2.7%, Banking-KBE +2.5%, US Fincl. Svcs.-IYG +2.4%, Financials-XLF +2.2%, Global Wind Energy-FAN +2.1%, Steel-SLX +2.0%.

Relative Weakness:

Short-Term Futures-VXX -9.4%, Cocoa-NIB -2.3%, Jr. Gold Miners-GDXJ -2.0%, REIT-ICF -1.5%, Sugar-SGG -1.4%, US Real Estate-IYR -1.1%, Platinum-PPLT -1.1%, Egypt-EGPT -0.8%, Japanese Yen-FXY -0.7%, Thailand-THD -0.3%, British Pound-FXB -0.2%, Peru-EPU -0.1%, New Zealand-ENZL -0.1%, Canadian Dollar-FXC -0.1%.

 Currency Commentary: Euro Rallies on French Elections

• The Dollar Index tumbled below its 200-sma (99.10) as a risk on rally following the French elections led to a surge in euro bids. The DXY is now at its lowest level since the U.S. elections as it breaks through key support levels. The weaker dollar does help provide some relief to the Fed if it wants to further raise rates. The focus will turn to micro this week as we have the busiest week of earnings in 10 years against a relatively calm macro back drop. But the Q1 GDP numbers will garner plenty of attention at the end of the week. 
• The euro has jumped above its 200-sma in reaction to the French elections. The results were largely in line in and Macron and LePen will face off in the second round of elections. Given the accuracy of polls in the first round, we would expect to see them continue to hold influence over the euro in coming weeks. Markets will be watching closely as establishment has thrown its weight behind Macron's EnMarche while the fourth place finisher Melechon's crowd and its anti-EU rhetoric may follow the LePen trail. The ECB will be meeting on Thursday and it will be interesting to see if these results change the outlook for the central bank. It is unlikely but we would expect to see the 200-sma (1.0848) play a key role ahead of the second round elections.
• The pound has been consolidating in a tight range between 1.2760-1.2860 since its run up early last week. The ability to hold its gains is certainly encouraging. The French elections will also play in here as Macron has said he would favor tough negotiations with the U.K.. 
• The yen tumbled back to the 110 area in the risk off trade. The Bank of Japan is meeting on Wednesday night but there are little expectations around the meeting as the bank is expected to remain on its current course.
• The yuan remains a non-event despite the aggressive selling in equities. Markets are nervous about a potential slow down as the government continues to take steps to cool aggressive credit expansion that has fueled a property bubble. But those actions have had little impact on the yuan which has remained in the 6.86-6.89 area over the past two weeks (BONDX, FOREX). 

 McDonald's Earnings Preview  (134.49 +1.09)

McDonalds (MCD) is scheduled to report Q1 earnings before the open tomorrow. The company reported last quarter's earnings at 7:58 am ET (and a conference call is scheduled for 11:00 am ET)

• Consensus estimates Q1 adj. EPS of $1.33 (vs. $1.39 last year) on revs of $5.5 bln (-7% Y/Y).
  
  • Estimate for Q1 comps is for +1.4%
• Co typically does not provide guidance, but the co did set constant currency financial targets at its Investor Day on March 1.
  
  • These targets include systemwide sales growth of 3% to 5%
  • Operating margin to mid 40%
    
    • 2016 operating margin was 31.4%
  • EPS growth in the HSD
    
    • Previous target: operating income growth of 5% to 7% excluding certain charges in 2016, and one year ROIC.
• Last earnings, MCD beat on EPS and comps and reported revs inline
  
  • The stock opened slightly down and ended the day down ~0.7 down at 121.38.
• Shares have trended upwards ~10% in the last 3 months as shares are currently trading at all-time highs
  are some other restaurant names that have been trending upwards during the last few months, as well.
  
  • In the last 2 months, the acquisitions of Popeyes (PLKI) and Panera (PNRA) have been a positive catalyst for the restaurant industry w/ many names such as ARCO (a MCD franchisee that operates/franchises over 2140 MCD restaurants in the Caribbean), BJRI, CMG, DRI, and RRGB all in uptrends over the last few months

Comps Trends From Last Quarter

• Global comparable sales increased 2.7% (+3.5% in Q3 and +3.1% in Q2) vs. ests near +1.5%, reflecting positive comparable sales in all segments. Operating income up 7% in constant currencies
• In the U.S., comparable sales increased 1.3% (+1.3% in Q3), reflecting the lapping of the first quarter of the all-day breakfast initiative
• Comparable sales for the International Lead segment increased 2.8% (+2.8% in Q3) for the quarter, led by the UK
• In the High Growth segment, second quarter comparable sales increased 4.7%, led by positive perfoermance in China and across the entire segment.
• Comparable sales rose 11.1% in the Foundational markets, reflecting very strong performance in Japan and certain markets in Latin America.

Analyst Actions:

• On April 21, BMO Capital initiated w/ Outperform.
• On April 21, Telsey Advisory Group raised its target to $140 from $136. The firm notes as mgmt accelerates its pace of change; improves its core competencies in quality, convenience and value; continues to improve consumer perception of its food and service quality; and supports those improvements with its predatory advertising scale; the firm believes McDonald's operating trends will further accelerate, lending upside potential to their current revised projections.
• On April 20, Barclays mentioned the co as one of its best ideas in the restaurant sector
• On April 18, Bernstein upgraded to Outperform from Market Perform
• On April 17, Wells Fargo upgraded to Outperform from Market Perform
• On March 17, Credit Suisse noted, «Channel checks point to accelerated SSS through March-to-date»

Peers: YUM, WEN, BKW, CMG, SHAK, RRGB

 

 

 Westlake Chemical Partners: Harvest Fund Advisors increases passive stake to 21.5% (Prior 13.8%)  (25.33 +0.18)

 

 Midday Market Summary: French Vote Leaves U.S. Stocks Solidly Higher at Midday

The bulls moved the stock market swiftly higher out of the gate on Monday morning, fueled by the positive sentiment surrounding yesterday's French vote. However, the looming possibility of a government shutdown in the U.S. has kept gains in check thus far, leaving the S&P 500 (+1.0%) near its opening level at midday. 

Centrist candidate Emmanuel Macron and far-right candidate Marine Le Pen will face-off in the final round of the French presidential election on May 7 after finishing in first and second place, respectively, in the first round. Current polls give Mr. Macron a 20 point lead over Ms. Le Pen, which has been construed as a positive for investors given Ms. Le Pen's anti-EU rhetoric.

France's CAC (+4.1%) finished its trading day at its best level in nine years with markets around the globe--Germany's DAX (+3.4%), UK's FTSE (+2.1%), Japan's Nikkei (+1.4%), Hong Kong's Hang Seng (+0.4%), and India's Sensex (+1.0%)--reflecting the positive sentiment. The euro is up 1.2% against the U.S. dollar.

However, outside of the jolt at the start of Monday's session, U.S. equities have been relatively quiet as investors shift their focus from Paris to Washington. Congress will return from its spring recess on Tuesday, giving legislators just four days to pass a new spending bill and prevent a government shutdown. Reports indicate that President Trump will try to use the deadline to leverage funding for his promised barrier along the U.S./Mexico border, which may complicate what was expected to be a fairly routine passage.

Furthermore, if Congress can't pass a continuing resolution to keep the government running, investors will no doubt lose confidence in the new administration's ability to tackle more controversial issues such as tax reform, which has been a major catalyst in the stock market's post election rally. This concern is most clearly seen in the Treasury market, which has reclaimed much of its earlier loss, pushing the benchmark 10-yr yield (2.27%) back below the important 2.30% mark. Buyers' willingness to purchase U.S. sovereign debt in an otherwise risk-on day is certainly something to be watched in the afternoon session.

Sector standings have been fairly consistent throughout today's session with the financial group (+2.2%) leading the stock market higher from the jump. Nine of eleven sectors trade in positive territory with cyclical spaces generally outperforming their countercyclical peers. The lightly-weighted real estate (-1.3%) and telecom services (-0.1%) groups are the only sectors to trade in negative territory.

Investors did not receive any economic data in today's session.

 Earnings Calendar for Monday, April 24th

• Today after the close look for the following companies to report:
  • ESRX, TMUS, WHR, CNI, AA, AMP, ABX, NEM, SANM, WRB, OI, RE, CCI, SWFT, CR, UIS, ZION, RRC, CDNS, WNC, HMN, KNL, JJSF, UDR, SLCA, ACC, HSII, WRI, HMST, LXU, CBU, HTLF, NBTB, RMBS, QDEL, HSTM, IBTX, AKR, LLNW, ADC
• Tomorrow before the open look for the following companies to report:
  • ERIC, VLO, NVS, CNC, LMT, CAT, KO, RAD, DD, MMM, AN, LLY, SAP, PCAR, FCX, TECK, SVU, BIIB, XRX, LH, GLW, BHI, AXE, PHM, MAS, AGR, R, JBLU, NLSN, FITB, AKS, SPGI, NTRS, PNR, PII, TROW, GPK, WAB, WSO, HUBB, ATI, EAT, ST, GCI, MDR, TUP, CIT, WAT, SCL, TRU, BPOP, ASTE, BKU, FNB, LPT, ONB, FBP, SIR, CPLA, JAKK, DFRG, FBC, CTG, FCF, RDWR, PPBI, ABXT

 

 

 

 Hearing Barnes Group was downgraded earlier to Neutral from Buy at Sidoti  (51.72 +0.29)

 

 Events and conferences of interest for tomorrow

Events and conferences of interest for tomorrow, April 25th include:

• ICE USA 2017 (April 25th-27th)
  • Scheduled to appear: CDNS, NDSN
• BioProcess International European Summit (April 25-26th)
  • Notable co to present: PTHN
• Oil and Gas Supply Chain Compliance 2017 (April 25th-27th)
  • Schedueld to appear: DNB

 

 Currency Market Summary

Dollar Slides as Euro Touches 5-Month High

• The U.S. Dollar Index lost 0.79% to 99.18 today as the euro ripped higher on the French presidential election results and the yen dropped as investors abandoned safe-haven assets. The other majors were generally steady but emerging market currencies, particularly the Turkish lira and the Russian ruble, embraced the general rally in risky assets and advanced against the greenback. Financial tension increased in China as regulators sounded an unsympathetic tone despite increased stress in the financial system there. The Canadian dollar continues to flirt with a 52-week low against the dollar. WTI crude lost 0.77% to $49.24/bbl., putting pressure on the loonie  
• EUR/USD: +1.17% to 1.0851
  • Germany's Ifo Business Climate Index rose more than expected to 112.9 for April from 112.4 in March
    
    • The Business Expectations Index unexpectedly fell to 105.2 from 105.7
    • The Current Assessment unexpectedly jumped to 121.1 from 119.5
• GBP/USD: -0.23% to 1.2788
  • In the U.K., CBI Industrial Trends Orders fell more than expected to 4 in April from 8 in March
  • The Rightmove House Price Index was up 1.1% m/m in April (1.3% prior)
• USD/CHF: +0.08% to 0.9965
• USD/JPY: +0.71% to 109.79
  • Japan's Leading Index for February was revised up to 104.8 from 104.4
  • The Coincident Index fell to 115.3 from 115.5
• USD/CNY: unch at 6.884
  • Chinese regulators said on Sunday that «Over the past week, interbank rates trended higher, bond and capital markets suffered from sustained corrections and some institutions faced liquidity pressure. But these have little impact to the stability of the broader environment.»
  • The PBoC's reverse repo program has been used liberally to inject liquidity into money markets for the sake of stability. Indications that regulators are willing to slow their intervention to clamp down on financial excesses are very worrisome to investors 
• USD/RUB: -1.03% to 55.88
  
• USD/TRY: -1.76% to 3.576
  
• USD/BRL: -0.50% to 3.132
  
• USD/MXN: -0.45% to 18.72 
  
• USD/CAD: +0.17% to 1.3514
  • Canadian wholesale sales slipped by 0.2% m/m in February, beating expectations for a 1.0% drop after 3.0% growth in January
  • Sentiment on the housing market has reached an eight-year high, according to the Bloomberg Nanos Canadian Confidence Index. Officials in Ontario are taking steps to crack down on speculation in Toronto
• AUD/USD: +0.25% to 0.7559
  
• NZD/USD: -0.23% to 0.7013

 Ultra Clean Holdings seeing notable strength in recent trade, higher by 4.6%  (16.85 +0.74)

 

 Energy Closing Prices

• June Crude Oil futures fell $0.41 (-0.8%) to $49.23/barrel
• May Natural Gas closed $0.03 lower (-1%) at $3.07/MMBtu
• June RBOB Gasoline closed $0.02 lower (-1.2%) at $1.63/gallon
• June Heating oil futures closed $0.02 lower (-1.3%) at $1.54/gallon

 Energy Sector Summary

The Energy Sector (XLE, +0.9%) trades higher in-line w/ broader market (SPY, +0.9%) which is trading higher following the French election over the weekend. Crude oil (USO, -0.4%) futures trading lower for the 4th straight session following Friday's rig count data and extending last weeks losses on lack of confirmation that OPEC will extend output cuts until the end of 2017. Russian officials also made comments indicating it would lift output if the OPEC doesn't extend output cuts. Lastly, natural gas (UNG, -1.4%) futures are trading down for the 3rd straight session.

Upcoming data reminders:

• API data will be released tomorrow at 4:30 pm ET.
• EIA petroleum data will be released Wednesday at 10:30 am ET.
• EIA natural gas data will be released Thursday at 10:30 am ET.
• Baker Hughes (BHI, +1.8%) rig count data will be released Friday at 1 pm ET.

Earnings

• Bill Barrett (BBG +4%) provides update on certain expected Q1 metrics, sees production sales volume at upper end of guidance
• Helix Energy (HLX -12%) beats by $0.02, misses on revs
• Precision Drilling (PDS -2.5%) reports Q1 EPS of (C$0.08) vs (C$0.10) Capital IQ Consensus Estimate; revs C$346 mln vs C$345.06 mln Capital IQ Consensus Estimate

 

Notable Gainers:

• Oil & Gas Drilling & Exploration: Rex Energy Corporation ( REXX, + 17% )
• Equipment and services: Willbros Group, Inc. ( WG ,+ 5% )
• Independent oil & gas: Zion Oil & Gas, Inc. ( ZN, + 7% )
• Major-integrated: MagneGas Corporation ( MNGA ,+ 6% )
• Pipelines: EnLink Midstream, LLC ( ENLC ,+ 3% )
• Refining & Marketing: HollyFrontier Corporation ( HFC ,+ 4% )

Notable Laggards:

• Oil & Gas Drilling & Exploration: Torchlight Energy Resources, Inc. ( TRCH, -16% )

• Equipment and services: CSI Compressco LP ( CCLP, -15% )
• Independent oil & gas: Atlas Energy Group, LLC ( ATLS, -24% )
• Major-integrated: Aegean Marine Petroleum Network Inc. ( ANW, 0% )
• Refining & Marketing: Sunoco LP ( SUN, 0% )
• Pipelines: Blueknight Energy Partners, L.P. ( BKEP, -1% )